FAQs
How are the indices calculated?
The methodology was developed by the Center for Real Estate at MIT and is an extension of market-accepted regression-based, repeat-sales indices. By using only properties that have transacted at least twice, we ensure that we are isolating price changes in a like asset.
Click here to read the white paper written by David Geltner and Henry Pollakowski at the Center for Real Estate at MIT.
Click here to read a note on the index methodology enhancement.
Who is Real Capital Analytics?
Real Capital Analytics, Inc. is a national research and consulting firm with offices in New York City and San Jose. Started in 2000, RCA's proprietary research is focused exclusively on the investment market for commercial real estate. In addition to collecting transactional info for current property sales and financings, they analyze and interpret the data, providing valuable insight into the dynamic capital environment for real estate. Covering all U.S. markets, RCA's investment market data and analysis is relied upon by all segments of the real estate community, from buyers, developers, brokers and lenders. Timely, complete and accurate reporting of investment activity is the hallmark of Real Capital Analytics.
What is the MIT Center for Real Estate (CRE)?
MIT founded the Center for Real Estate in 1983 to improve the quality of the built environment and to promote more informed professional practice in the global real estate industry. The CRE is home to the first-ever one year Master of Science in Real Estate Development (MSRED) degree, as well as an integrated suite of professional development courses.
The CRE's pioneering research investigates the real estate transaction from initial concept to market reality, providing breakthrough knowledge that helps organizations to capitalize on today's dynamic markets and technologies.
Uniting industry leaders with MIT's distinguished researchers and students, our selective industry partnership program advances the art and science of international real estate, and bridges the gap between theory and practice.
How does RCA ensure that the Prior Sale information is appropriate?
Click here for a summary description of the data collection and verification process developed and managed by Real Capital Analytics.
Which indices are offered and how often are they published?
REAL publishes 29 indices: one national all-property, four national, four top ten MSAs, 12 regional and eight MSA-level. The national indices are published monthly, while the regional and market-level indices are published quarterly. Click here for a list of the indices.
Are there other indices that can be developed and published?
The benefit of using Real Capital Analytics data is that we can customize the indices to better match your risk profile. There will be several generations of indices which will allow users to fine tune their hedges. Possible customized indices will focus on 24-Hour CBD Office, Port-City Industrial, Rapidly Growing Market Multi-family.
How big is the market for commercial real estate in the United States?
Opinions differ but the general consensus is that there exists between $6-8 trillion of commercial real estate assets in the United States.
How is this index assisting in the development of the commercial real estate asset class?
Real estate has been viewed from an institutional standpoint as an inefficient, illiquid asset class, which is expensive and difficult to enter and transact.
Over the past two years, the commercial real estate market has seen well over $250 billion per year in transactions. Estimations suggest the total transaction costs can range between 300bps - 800bps, or in excess of $10 billion dollars annually when all fees are taken into account.
Due to advances in the sophistication of data collection and capital markets, the industry is prepared to address these inefficiencies through the implementation of a new set of indices and financial products. These new indices can provide investors and hedgers for the first time with a high-quality solution, offering far greater efficiency, real-time exposure and liquidity.
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